Fresh on the heels of a report that shows China Manufacturing PMI barely Above Contraction comes news the Chinese service sector is following suit.
The Markit China Composite PMI shows Activity growth eases across both the manufacturing and service sectors in April.
- Composite data signals slower activity and new business growth in April
- Total employment falls for first time since last October
- Both input prices and output charges decline at the composite level
HSBC China Composite PMI™ data (which covers both manufacturing and services) signalled an expansion of output for the eighth consecutive month in April. However, the HSBC China Composite Output Index signalled only a marginal rate of growth, posting at 51.1. This was down from 53.5 in March, suggesting that the rate of expansion was the weakest since last October.
Behind the weaker expansion of total output was a slower rate of new order growth in April. Both the manufacturing and service sector posted modest rates of expansion that were weaker than in March. Overall, new order growth at the composite level was the slowest in seven months.
Backlogs of work decreased at service providers, but rose at manufacturers in April. That said, the rates of change were marginal in both sectors. At the composite level, backlogs of work declined for the third month in a row, though only slightly. Employment levels decreased across both the manufacturing and service sectors in April.
Although the rates of job shedding were only marginal in both cases, it was nonetheless the first time service providers had cut their staff numbers since January 2009 and was the first reduction in manufacturing payroll numbers since last November. Consequently, employment at the composite level fell slightly in April.
Signs that the global economy has stalled, if not in outright recession (I believe the latter) continue to mount.
Mike “Mish” Shedlock